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Delaware residents facing flood insurance hikes

ELSMERE, Del. (AP) -- Premiums for thousands of Delaware property owners may increase significantly because of changes to the National Flood Insurance Program, but it seems many residents may not know about impending rate hikes of up to 25 percent.

"We have been hearing from a few people, but it's not been the volume of complaints and concerns that I understand some other states are experiencing," said Mike Powell, a program manager for the Department of Natural Resources and Environmental Control.

For many years, the federal government has offered subsidized flood insurance on homes and businesses across the country. But the combination of discounted premiums and a series of catastrophic storms has left the flood insurance program deeply in debt. The situation prompted Congress to pass a law two years ago aimed at requiring policyholders to start paying rates based on the true risk of flooding at their properties.

Although President Barack Obama signed a law last week easing some of the dramatic rate hike provisions of the 2012 legislation, many policyholders who have been paying subsidized premiums are still going to be hit with steady rate increases over the next several years.

Records obtained by The Associated Press from the Federal Emergency Management Agency show that of the roughly 25,900 flood insurance policies in effect in Delaware as of December 2012, more than 3,600, or 14 percent, have been subsidized in the past and are facing rate increases. Those increases can range up to 18 percent a year for primary residences and apartment buildings, while premiums for vacation homes and businesses will increase 25 percent annually.

But it appears that many policyholders in Delaware may not be aware of the impending rate increases.

Elsmere town manager John Giles Jr. said he has not heard from any residents of the northern Delaware community about the rate increases. According to federal officials, more than 70 percent of policies in Elsmere will be affected, which is the highest rate in the state along with the small Kent County community of Leipsic, which has far fewer policyholders.

"I haven't heard anything," said Rosa Torres, 56, an Elsmere-area resident who bought a home on Brookside Avenue, which borders Little Mill Creek, about 12 years ago. Until a flood abatement project several years ago, the creek was a source of regular flooding.

Torres, 56, said she doesn't know how much she is paying for flood insurance because the paperwork goes straight from the insurance company to her mortgage company, but she doesn't believe her premium is subsidized.

"It's very high," she said, adding that an 18 percent premium increase could be a substantial burden for some property owners.

"People are going to lose a lot of houses around here if the insurance goes up," she said.

Torres said her property has flooded only one time, shortly after she bought the house. The water crept into her front yard but didn't get inside the house, she said.

Since the flood control project, which involved widening and raising the banks of Little Mill Creek, there's been no problem with flooding, but Torres and many of her neighbors still have to pay flood insurance.

Phil Singles, 48, said a 1989 flood left more than 6 feet of water in the basement of his Brookside Avenue home, but that there's been no problem since the flood control improvements. He still has to pay his flood insurance, however, which he considers a rip-off.

"It does absolutely nothing unless the water knocks your house over," said Singles, who pays about $1,200 a year.

According to federal data, flood insurance premiums in force in Elsmere as of December 2012 totaled $203,777. That's more than half of the $398,000 in total claims paid since the town joined the federal flood insurance program.

Statewide, there was roughly $18.6 million of premiums in force at the end of 2012, amounting to about 24 percent of the $77 million in claims paid in Delaware under the flood insurance program.

Powell, DNREC's flood mitigation program expert, said all classes of insurance policies have been going up, and that the pending increases for some policyholders under the recent legislation are not that much different from what they have seen in the past.

Powell said most of the questions he's received are from property owners who want to know how the current updating of flood plain maps is going to affect them. Compared with the rate increases, the new flood plain maps that are going to be phased in are not going to be as significant, he said.

"A lot of people that I spoke to were getting good news, that the flood plains either were not changing for their properties or their house was coming out of the flood plain," Powell noted.